Written by Dan Tonkery for
Unlimited Priorities and DCLnews Blog
The publishing industry’s shift from print to e-formats has been growing rapidly. eBooks are the fastest growing segment of the publishing industry. In 2010 eBooks represented over 8% of the trade book sales in the United States. The growing number of devices further fuels the growth rate. By the end of 2011 there will be an estimated 21 million eReaders installed with a double digit growth in eReaders expected in 2012. Sales are forecast to exceed $1 billion dollars.
The growth of eBooks is welcome news to the publishing industry that has been experiencing a decline in book sales and shrinking shelf space as more brick and mortar stores are closing. The big Six publishers are taking full advantage of the eBook opportunity as is Amazon with a range of eBook services.
Given that most publishers are not technology driven organizations, most publishers will have to turn to technology based companies for their digital publishing solutions. Publishers are looking for companies that offer a full range of editorial, composition, and conversion services. In the eBook support area, publishers are looking for high quality, cost effective delivery to eReader devices, smart phones, and tablets. The technology company not only has to help prepare the content for the appropriate eReader format, they must also assist with the distribution to Apple’s iBookstore, Barnes & Noble, Kobo, Sony, and others.
Publishers are rushing to convert their current publications to eBooks and there is also a resurgence of interest in back lists. Several major publishers in the romance field are finding new sales life in their back-lists many of which have been out of print for years. So for companies offering digital publishing solutions there is significant work available in converting back-list or other legacy content into flexible digital formats for republishing in eBook formats.
The silver lining in the rapidly growing eBook market is the opportunity for digital publishing companies to support the publishing community by converting books, journals, catalogs, newspapers, microform, and newsletters to e-content. The entire publishing community from trade publishers, university presses, associations, government organizations, and even the STM presses all need a level of technical support during this exciting time. The traditional players in this market need to market their services and be aggressive in selling their services. With any new opportunity, the marketplace will see new host of players offering services. Such is the case with eBook services. The traditional technology partner companies in this marketplace need to insure that they bring their A game as the new companies entering the publishing market are often venture backed run by seasoned Silicon Valley trained entrepreneurs. Supporting eBook projects is becoming a very competitive market.
Given a steady supply of good content, a stable growing eReader market in place and a market that is rapidly expanding, what is missing in the eBook world? What was worrying publishers at the recent Book Expo in New York City? One of the themes I heard over and over was the issue of “discovery”. Publishers are worried that consumers are not going to be able to find newly published book as the traditional marketing and sales channels are not as useful in the digital age. While the Big 6 Publishers still have large marketing campaigns to promote a few of their best sellers, many other publishers as well as the self-publishing authors are left without an easy solution.
To solve this problem there is an effort underway to develop the next best book discovery tool which allows publishers to suggest unfamiliar content to consumers. There are over 20 start-up companies including BookTour funded by Amazon that are developing software solutions and tools to help authors with book promotion. Three books publishers Hachette, Penguin, Simon & Schuster have teamed up to start the Bookish Reading Group as an editorially independent platform to help with discovery and sales.
The New York Times recently added an eBook best seller list. Sales of eBooks are predicated to hit $1 billion dollars this year. There is a race to build a better discovery tool. Discoverreads (recently purchased by Goodreads and What Should I Read Next? are relying on engineering. Other services such as BookGlutton and Copia are creating a social experience.
aNobii is another new electronic book discovery and retail service owned by publishers and a retailer. The service is a socially-driven retail platform that aims to give publishers more consumer data than provided by digital sellers. The one thing that Amazon and Apple don’t do is help you decide what to read next. Although I would have to say that Amazon does a reasonable job of telling you what people have bought similar to the book you just purchased. So there is an algorithm that looks and compares purchases and brings other suitable candidates for the consumer to consider. Also Amazon offers book reviews which are helpful even if you don’t know the reviewer.
Readers buy books based on four reasons according to Kevin Smoker, the co-founder of BookTour; familiarity with the author; interest in the subject; a recommendation from a trusted source; or hearing about it in the media. Just take a look at the influence of Oprah and her Book Club. A recommendation of any book on her show sent book sales into the millions.
Interest in a subject or familiarity with an author certainly can help sell books on the web. For example, Amanda Hocking, a 26 year old new paranormal romance author is now selling 10,000 books a day and has just signed a four book deal with St. Martin’s Press. Less than two years ago she was a totally unknown self-published author who created a fan base with her paranormal romance genre.
The publishing industry is looking for the next app that will offer a sophisticated tool which will know the reader’s tastes and can make recommendations for your next reading pleasure much like Pandora does with music.
The digital publishing technology companies can help with discovery by helping to engineer and provide book tagging data for search engines to find and utilize. Already most companies are working to capture metadata including titles, chapter titles, authors, editors, volume, issues, page numbers, abstracts, and keywords. Capturing full and complete metadata is an important step in facilitating discovery.
The other challenge facing publishers and authors is finding the proper monetizing strategy. There are continuing debates and corporate fights over setting the price for eBooks. From the beginning, Amazon demanded and received a $9.99 price on all eBooks and forced publishers to accept a much lower list price for their eBooks than print. This pricing strategy went a long way to seed the eBook market and set the consumers expectation for low pricing for eBooks. Then along came Apple with their iBookstore and they set the publishing market on their ear with an agency model which in the end all the Big 6 publishers have endorsed. So eBook prices have increased. Under the agency model the publisher sets the price and Apple takes their 30% cut. Publishers have been more realistic in setting their eBook prices. Amazon has followed suit and now eBooks are priced higher and while publishers are happier with the arrangement, consumers are still smarting about the pricing models.
Self-publishing authors now have a number of viable choices. One of the more popular sites for self-publishing authors is Smashwords where they work with authors to produce eBooks and handle much of the background work and the author keeps about 80% of the retail price. Many self-publishing authors sell their eBooks at a much lower price than the traditional publishers. Smashwords titles are often sold at $2.99 or less. The 10 bestselling Amanda Hocking’s titles are all at $2.99 or less with many at .99 cents. It is amazing that even at that price she was able to sell over $2 million dollars’ worth of books on Amazon.
What is clear is we are in the early days of finding a proper monetizing strategy for trade books. The pressure is on publishers to price eBooks at a level that consumers will support. There is significant revenue in the eBook sales channel but much of the traditional costs will have to be reduced. The Big 6 publishers are facing a tough time ahead with the high overheads.
The STM and professional community is not under as much price pressure as trade books but it is clear that a different monetizing strategy is also needed here. The traditional monograph book is no longer only going to be sold as a unit. Publishers need to work out a pricing strategy that will enable a user to buy the full book, a chapter, a paragraph, a chart, a photograph or any other unit that can be supported. The same technical support is required for a journal or magazine subscription. There is an important role for the digital publishing solutions companies to fulfill.
The technology needs to be in place to support the acquisition of an issue, article, table of contents, or subunit of the journal. An annual subscription to the journal may not continue to be a unit of choice for libraries. I expect the user community to begin buying information in subunits and the technology needs to be in place to support it. Already the major hosting services allow organizations to buy information by the download via a token or some other mechanism. I expect that this trend will be expanded. We need the systems in place to allow users to acquire information in any number of units or subunits.
Publishing is a changing industry and the industry will need the best technical support that they can afford. Companies offering digital publishing solutions are well placed to assist with the changes and take a leadership role in supporting the new user world.
About the Author
Dan Tonkery is president of Content Strategies as well as a contributor to Unlimited Priorities. He has served as founder and president of a number of library services companies and has worked nearly forty years building information products.